What does the acronym APR stand for in mortgage lending?

The acronym APR stands for Annual Percentage Rate in mortgage lending. This term is critical as it represents the total cost of borrowing expressed as an annual rate, which includes the interest rate as well as any associated fees and additional costs over the term of the loan. The APR provides borrowers with a more comprehensive understanding of the true cost of borrowing, enabling them to compare different loan offers more effectively.

Using APR allows consumers to grasp how the interest and other costs affect the overall cost of the mortgage. This is particularly important as it influences the monthly payments and the total amount of interest paid over the life of the loan. By having a standardized way to express this cost, lenders ensure that borrowers can make informed decisions when selecting loan products. Thus, the definition and implications of APR are essential for anyone involved in mortgage lending or borrowing.